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Energy tax exemption to promote renewables

The European Commission has approved Swedish state aid concerning a five year energy tax exemption in favour of the company Agroetanol for the production of bioethanol. This is produced from cereals and blended at low levels with traditional motor fuels and can be used in ordi...
The European Commission has approved Swedish state aid concerning a five year energy tax exemption in favour of the company Agroetanol for the production of bioethanol. This is produced from cereals and blended at low levels with traditional motor fuels and can be used in ordinary vehicles. It has the advantage of being carbon dioxide neutral thereby ensuring enhanced environmental performance.

The Commission has however recommended, in accordance with state aid rules, that the production costs differential of bioethanol and fossil fuels during the exemption period are monitored. This is in order to react to changes in this differential, if necessary, by reducing the tax exemption so that the state aid would not be granted to the company in excess of the extra production costs it incurs in producing bioethanol.

In view of the monitoring and evaluating to be carried out on the project, as well as the time limitation and the volume of production of bioethanol, the Commission accepted that the aid concerned a pilot project. This means that it is eligible for tax exemptions under the Directive on the harmonisation of the structures of excise duties on mineral oils.

Related information

Countries

  • Sweden
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